Overview of Kaiser Medical Malpractice Arbitrations in California

Whenever a patient receives medical care, the healthcare provider rendering that care is obligated to use the level of skill, care, and knowledge that a reasonably careful provider would use in the same or similar circumstances. When due care is not used in the medical setting, the consequences can be catastrophic, as errors and omissions by doctors, nurses, or hospitals can easily lead to misdiagnoses, delays in diagnosis, or entirely new injuries not related to the underlying reason the patient sought medical assistance. In turn, these can lead to prolonged illness, permanent disability, or even death.

In most medical malpractice cases, the victim can file a lawsuit in court and seek compensation for the injuries they have suffered. However, when there is a valid arbitration agreement between the healthcare provider and the victim, the dispute may be forced into arbitration instead.

Kaiser Permanente is one of the oldest health maintenance organizations (HMOs) in the United States. Its health insurance plan covers millions of people in both Southern and Northern California and, as of September 2020, its medical groups employed more than 17,000 physicians. But for all its size and organization, medical malpractice can still arise from care and treatment rendered by Kaiser’s healthcare providers.

Kaiser routinely enforces binding arbitration in medical malpractice cases. An arbitration clause is regularly included in the enrollment paperwork for Kaiser members and an arbitration notice is generally present in the Evidence of Coverage paperwork for each Kaiser individual plan, as well as the group policy paperwork for group plans. These arbitration clauses require Kaiser members to forfeit their rights to the court process and a jury trial for all medical malpractice claims, no matter the specifics of the case, and instead, submit to the authority of a third-party arbitrator in any such dispute.

If you or a loved one were injured through Kaiser Permanente’s malpractice or negligence, it is critical that you select a lawyer who has experience with these specific types of cases.

What is Arbitration?

While normal civil lawsuits are usually filed with a court, presided over by a judge, and decided by a jury if they go to a jury trial, arbitrations work somewhat differently. Arbitration is a form of alternative dispute resolution meant to resolve disputes outside of a court of law. In arbitration, one or more third parties preside over the legal proceedings, which ultimately culminate in a hearing where evidence is presented, witnesses are called, testimony is taken, and arguments are exchanged. 

The arbitration hearing can essentially be thought of as a private trial, as the basic elements of a trial, such as direct examination and cross-examination of witnesses, are still performed, but these procedures are not done within the confines of a courtroom. In arbitration proceedings, the party bringing the legal claim is known as the “claimant” and the party responding to and defending against this claim is known as the “respondent.” Despite the difference in terminology, the roles of these parties are the same as their civil court counterparts: plaintiffs versus defendants.

In cases where there is only a single individual hearing presiding over the arbitration proceedings, this third party is simply identified as the “arbitrator.” Usually, this individual is meant to be a “neutral arbitrator,” meaning that he or she is supposed to be impartial, unbiased, and disinterested to the outcome of the case. The role of a sole neutral arbitrator can be conceptually thought of as a combination of judge and jury: he or she is to hear the case fairly, decide what evidence is admissible and what is not, and determine who should prevail at the close of evidence.

Other cases may use a panel of arbitrators, where multiple people are tasked with hearing the case. Sometimes, the panel may include party-appointed arbitrators, often simply called “party arbitrators.” Whereas neutral arbitrators are usually appointed through joint agreement of both sides to the dispute, with both the claimants and respondents agreeing that the particular neutral can hear the case fairly, or by a specific process that is designed to result in an unbiased selection, party arbitrators are selected unilaterally by a single party. Depending on the applicable rules that govern the particular arbitration, party arbitrators may not be required to be neutral and can actually be partisans of the side that selected them. 

A typical scenario where party arbitrators are seen involves a three-arbitrator panel: one party arbitrator chosen by the claimant, one party arbitrator chosen by the respondent, and one neutral arbitrator. In that setup, the party arbitrators assist in the decision-making process of the neutral arbitrator as the evidence is heard in the arbitration hearing. They may try to point out facts that most benefit their associated side, but final decisions still need to be made fairly by the panel, with the neutral often having the greatest weight or final say on a matter.

Arbitration hearings are often less formal than trials in a courtroom, as they may instead take place in a conference room in an office. However, they have just as much weight, for they are meant to result in a conclusive determination on all issues in dispute. Indeed, many arbitrations are meant to be “binding.” In a binding arbitration, the decision of the arbitrator or arbitrators at the end of the case is considered final and all parties are legally bound by that decision. The arbitration award in binding arbitrations can be enforced by courts and is generally not subject to challenge or appeal.

In many arbitration proceedings, the parties will generally engage in discovery and investigation before the arbitration hearing in effort to obtain relevant evidence, much like in a typical civil lawsuit before trial. This discovery and investigation may involve sending subpoenas or requests for medical records, propounding discovery, and taking depositions.

A major reason why arbitrations are enforced in many settings is because they are typically confidential and private. Arbitrations, being legal proceedings outside of a court, do not result in a court docket full of publicly available documents. Arbitration awards are also often confidential, with their specific details not subject to public disclosure. There are some exceptions however, most notably mandatory disclosures to state regulatory agencies, such as the Medical Board of California. If an arbitrator finds that a licensed healthcare professional was negligent and awards damages to the claimant, the details of that award may still be sent to the Medical Board or other licensing agency per state law so it may conduct any further investigation if warranted.

What Has to Be Proven in a Medical Malpractice Arbitration Against Kaiser?

As with a medical malpractice claim brought before a court of law, the injured party needs to prove the following in order to prevail in a Kaiser arbitration proceeding:

• They were owed a professional duty of care by the healthcare provider;
• There was a breach of this duty by the healthcare provider;
• That the breach of the duty of care caused injuries; and
• That the injuries have resulted in measurable damages.

Healthcare providers must always render care and treatment within the standard of care, meaning that they must utilize the level of skill, care, and knowledge that a reasonably careful provider would use in the same or similar circumstances.  When a healthcare provider fails to exercise this level of reasonable care and because of that failure, the patient is injured and suffers damages on account of that injury, it is medical malpractice.

Proving whether the standard of care was breached and whether the breach of the standard of care caused injury requires the input of expert witnesses. This is true in all forms of medical malpractice cases, including arbitrations against Kaiser.

Medical malpractice cases, whether they be lawsuits before a court or arbitration proceedings, can be extremely challenging affairs. It is strongly recommended that anyone considering medical malpractice litigation seek legal assistance with attorneys who understand the intricacies of these often difficult and complex cases.

What Can Be Recovered in a Medical Malpractice Arbitration Against Kaiser?

The recoverable damages in a medical malpractice arbitration versus Kaiser are the same as in other forms of medical malpractice litigation. Thus, one can still recover both non-economic damages and economic damages.

Non-economic damages represent the value of non-quantifiable or abstract losses sustained by the injured party. The value of an injured person’s pain and suffering, loss of enjoyment of life, worsening of prior injuries, and emotional anguish are all forms of non-economic damages. These are a significant component of any claim for personal injury, including medical malpractice claims. Damages for loss of consortium or for the loss of love, companionship, and affect in wrongful death cases are also considered non-economic damages.

In California, the Medical Injury Compensation Reform Act of 1975 (abbreviated as MICRA) limited the recoverable non-economic damages in all medical malpractice cases to a maximum of $250,000. Just as this law, codified in Civil Code section 3333.2, affects medical malpractice cases in Superior Court, so does it affect Kaiser arbitrations.

Economic damages represent quantifiable losses sustained because of the injuries alleged in the case. Loss of past and future earnings, loss of household services, and past and future medical expenses are all common forms of economic damages and each of those may be recovered in medical malpractice actions, including Kaiser arbitrations, if proven by evidence. Although MICRA placed a maximum limit on recoverable non-economic damages in any medical malpractice case, there is no such limitation on economic damages.

Who Runs the Kaiser Arbitration System?

Kaiser’s arbitration system is administered by the Office of the Independent Administrator, which is commonly referred to as the OIA. The OIA manages and coordinates arbitrations between Kaiser and its California health plan members. Although the OIA is a neutral, independent office and not a part of Kaiser, it is paid by Kaiser to maintain the arbitration system, develop and update the rules that govern Kaiser arbitrations, and oversee all of the cases in arbitration.

The OIA has a website at https://www.oia-kaiserarb.com/. On that website, the OIA hosts the current Rules for Kaiser Permanente Member Arbitrations, provides detailed information concerning the arbitration system, and provides annual reports, statistics, and demographics concerning the arbitration cases in its purview.

How is the Arbitration Process Started?

Arbitration proceedings against Kaiser are initiated by submitting a “Demand for Arbitration” to the appropriate Kaiser legal department. This will depend on whether one is alleging malpractice against providers with Kaiser’s Northern California operations or against providers with Kaiser’s Southern California operations. The Demand for Arbitration is analogous to a Complaint in a civil lawsuit in that it sets forth the allegations in the case and demands a legal remedy.

There is no required Demand for Arbitration form and no special filings are required to demand arbitration with Kaiser. The OIA website even states that mailing a letter will suffice. However, the Demands are generally required to include the following information: 

• The basis of the claim being brought;
• The amount of damages (monetary compensation) being sought;
• The contact information for the claimant or their attorney; and
• The names of all the Kaiser entities believed to be at fault for the claimant’s injuries.

Kaiser Permanente is technically made up of several distinct, but interdependent, legal entities, including:

• Kaiser Foundation Health Plan, Inc.: The HMO insurance provider that contracts with the other Kaiser entities to actually provide medical and hospital services;
• Kaiser Foundation Hospitals: The entity that operates Kaiser’s hospital facilities; and
• Regional Permanente Medical Groups: Which employs the physicians and other healthcare providers who actually provide patient care.  In California, there are two Kaiser medical groups:
  • The Permanente Medical Group, Inc.: Which provides services and employs healthcare providers in Northern California; and
  • Southern California Permanente Medical Group: Which provides services and employs healthcare providers in Southern California.

Much like in a Complaint filed in a civil court, the Demand for Arbitration needs to name the correct parties believed to be at fault for the injuries that were sustained.  Thus, a case against Kaiser involving medical care provided in Southern California will generally name the Kaiser Foundation Health Plan, Inc.; Kaiser Foundation Hospitals; and Southern California Permanente Medical Group in the Demand for Arbitration.  They will become the respondents in the arbitration proceedings.

After the Demand for Arbitration is received by Kaiser, the OIA will be notified via a “Transmission Form.”  A copy of this form will also be sent to the claimant.  Once the OIA has received this form, it will begin administering the arbitration.

The OIA requires that all claimants in a Kaiser arbitration pay a one-time, non-refundable $150.00 filing fee to the OIA “Arbitration Account” within 75 days of the date of the Transmission Form, unless there is a fee waiver under the arbitration rules or unless payment was enclosed with the demand for arbitration. Failure to pay this fee or get a waiver will result in the arbitration being deemed abandoned.

Kaiser will generally assign outside legal counsel to the case after the Demand for Arbitration has been filed. Once the copy of the Transmission Form has been relayed to the claimant or claimant’s attorney, discovery may commence and the parties may begin working the case up just as if it were filed in a court of law.

The OIA’s webpage on Demands for Arbitration can be found at https://www.oia-kaiserarb.com/13/rules-and-info/rules/demand-for-arbitration.  

What If There’s Already a Lawsuit Filed Against Kaiser in a California Superior Court?

Although one can file a lawsuit against Kaiser and attempt to seek a court trial instead of binding arbitration, Kaiser routinely seeks to have medical malpractice cases filed in Superior Court sent to arbitration. Kaiser’s attorneys may bring a Petition to Compel Arbitration in such an instance, citing how the Kaiser enrollment forms and other plan documents have arbitration clauses in them that state that, as a condition of enrollment, the injured party forfeited a right to jury trial and agreed to binding arbitration only to resolve such disputes.

Under current California Supreme Court decisions, Kaiser’s arbitration clauses are considered valid and enforceable. Thus, if Kaiser’s attorneys properly bring a Petition to Compel Arbitration, backed by the relevant contract, in a situation where the case was filed in court instead of having been submitted to arbitration, the Court may grant that petition and order that the dispute be decided in arbitration after all.

How Many Arbitrators Are There in Medical Malpractice Arbitrations Versus Kaiser?

Generally, if the amount in controversy is $200,000 or less, the arbitration is heard and determined by a single neutral arbitrator.

If the amount in controversy is greater than $200,000, the Rules state that the arbitration may be heard by neutral arbitrator and two-party arbitrators. However, the parties may decide to waive, and are usually encouraged to waive, party arbitrators. In such an event, the arbitration shall be presided over and decided by only the sole, neutral arbitrator. 

How is the Neutral Arbitrator Selected?

After the Demand for Arbitration is and the OIA receives the $150.00 filing fee, it will send both sides in the case a list of twelve possible neutral arbitrations. The names are on the list are randomly selected from the OIA’s index of available arbitrators for Northern California, Southern California, or San Diego. The regional index utilized depends on where the alleged malpractice occurred. Thus, a case involving medical care that was rendered in Los Angeles will use a list of arbitrators available throughout Southern California.

Selecting a neutral arbitrator off the OIA list is not strictly mandatory. The parties to the dispute are permitted to jointly select an individual to be the neutral arbitrator.  Provided that this person also agrees in writing to serve as the neutral arbitrator, then the selection may be made in this manner.

Otherwise, when the parties cannot agree, will not agree, or did not agree on who should be the neutral arbitrator, they must go over the twelve names on the OIA list and decide who they would most prefer.  The parties are permitted to strike four of the names on the list as unacceptable and then must rank the remainder in their order of preference.  They then must return their ranked lists back to the OIA by the appropriate deadline, who will calculate the person most preferred by both sides. If that person can serve as the neutral arbitrator and agrees to the assignment, he or she will hear the case. If not, the OIA will then move on to the next most preferred candidate based on the party’s rankings.

Who Pays the Neutral Arbitrator?

In most Kaiser malpractice arbitrations, if the case is being heard by a single neutral arbitrator and the claimant agrees to waive any objections that may arise out of how the arbitrator is being paid, then the Kaiser respondents will pay for the fees and expenses incurred by the neutral arbitrator in hearing the case.  Otherwise, the general rule is that the fees and expenses incurred by the neutral arbitrator are shared equally by the claimants and the respondents.

Can a Kaiser Arbitration Award be Overturned or Appealed?

Generally, no. An arbitration award in a binding arbitration with Kaiser is meant to be final. Such awards are imbued with as much authority as a final judgment following a trial and their terms can be enforced in a court of law.

Barring exceptional circumstances, such as where the arbitration award was procured by corruption or fraud, the decision of the arbitrator or arbitration panel cannot be overturned, invalidated, or reviewed by either a trial court or a court of appeal. Even in instances where there is evidence that the award was procured by corruption, fraud or other undue means, the remedy may be to hold another arbitration proceeding.

Kaiser Arbitration Cases are Complex — Hire a Lawyer for Assistance

Just like a medical malpractice case in Superior Court, Kaiser arbitrations are complex matters with many deadlines and procedures that must be heeded. If you or a loved one were harmed due to medical malpractice at Kaiser, contact us at Hodes Milman for legal representation. We have decades of experience obtaining favorable case results for our clients through arbitration. Call us at (949) 640-8222 to schedule a confidential, no-obligation consultation. Get in touch with us before filing a demand letter so that we can begin preparing your case.